Whistleblower: Edina's Be Iced Jewelers leaves customer out in the cold

  • Article by: JANE FRIEDMANN , Star Tribune
  • Updated: February 25, 2013 - 9:54 AM

A Minneapolis woman is exhausting all collection options after an Edina jewelry store, with which she had $1,600 in credit, closed.

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Nina Wesman of Minneapolis took her unwanted jewelry to Be Iced Jewelers in Edina and received a sizable in-store credit. Months later, with $1,600 in credit yet to be spent, she found the store had closed.

Photo: ELIZABETH FLORES • eflores@startribune.com ,

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Last July, when Nina Wesman took her unwanted jewelry to Be Iced Jewelers, an Edina store that buys and sells used fine jewelry, she was pleased to find the dozen pieces were worth $5,700 in store credit, issued as a gift card. She could have taken a lower cash payout, but Wesman wanted to find a pair of gold and diamond stud earrings, ones “that you could actually see,” she said.

Months later, Wesman, of Minneapolis, discovered a different sort of value related to gift cards — the value of spending them before a business goes belly up.

In early December, with $1,600 in credit remaining, she went to the store to do some Christmas shopping, only to find a note on the door saying the business had closed.

This month, Be Iced’s CEO and president, David R. Pomije, filed for Chapter 11 bankruptcy for his Shakopee company Top Hat Inc., doing business as Top Hat 430 Inc., Be Iced Jewelers, Gold Stop, Bidx and Be Iced Diamond Exchange.

Wesman now has to get in line behind a string of other creditors with higher priority legal claims to Top Hat’s assets.

No stranger to bankruptcy

Be Iced is not the first failed venture for Plymouth entrepreneur Pomije, who could not be reached for comment. A call to his lawyer, Steven B. Nosek, was not returned.

A Commodore computer mail-order resale business that Pomije ran in the 1980s ended in bankruptcy. A travel club for golf lovers dissolved.

He had success in the early 1990s when he opened Funcoland, a chain of video-game swapping stores. Pomije sold the business to Barnes & Noble for $160 million. It was renamed GameStop.

In the late 1990s, working on the same recycling theme, he opened a business named 2nd Swing, which dealt in used golf equipment. The 50-store chain went bankrupt in 2006.

Pomije opened his first Be Iced Jewelers location in October 2005 in Edina. It featured an Art Deco waterfall.

But where’s the inventory?

As Wesman found, Be Iced’s Edina store could have doubled as an echo chamber when last she visited. Most of the 21 nationwide retail stores listed on an archived version of Be Iced’s website have disconnected numbers. Whistleblower received no reply to messages left with the remainder.

Chapter 11 bankruptcy is meant for a business that wants to come out alive on the other side of the process and have some control over any sale of its assets, according to George H. Singer, an attorney with Lindquist & Vennum LLP in Minneapolis.

But that usually requires the business to remain open in order to sell the inventory.

It is rare for a company to file for Chapter 11 “if every single location that they have is shut down,” Singer said. Any liquidation outside of “the ordinary course,” in this case retail stores, would need approval by the court, he said.

Pomije has yet to file bankruptcy schedules that would provide insight into the whereabouts of the inventory.

What’s a gal to do?

  • WHAT TO DO IF A BUSINESS CLOSES

    If a store closes and owes you money or merchandise, there are some steps you can take to try to recover what’s due to you.

    If the company hasn’t filed for bankruptcy

    See if there are other locations that haven’t closed. Send the company a letter; the mail may be forwarded. Ask neighboring businesses if they have any information. If your merchandise is locked in the store, see if the landlord can provide access. Dispute a charge with your credit card company. Retailers’ warranties may be honored by manufacturers and vice versa. If all else fails, file a police report.

    If the company has filed

    Newspapers print notices of filings. Detailed filings can be viewed and printed for a small per-page fee at www.pacer.gov. A federal website provides various documents for a $10-$40 fee at www.bankruptcy-records.us or call 1-800-416-6504.

    Company funds first go to pay creditors who have a lien on identifiable property, then taxes and some employee claims are paid. Any leftover money gets divided proportionately among “unsecured” creditors, such as customers.

    If you are a creditor and don’t receive notice from the court, file a “proof of claim” form with the appropriate federal court. Get a form at the courthouse or go to http://1.usa.gov/VU0ybY for Minnesota filings.

    Source: BBB; George H. Singer, attorney at Lindquist & Vellum LLP

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